ANNUAL REPORT
FOR FULL YEAR ENDED
30 JUNE 2020
The GO2 People Ltd
ACN 616 199 896
ANNUAL REPORT FOR THE YEAR ENDED
30 JUNE 2020
For personal use only
CONTENTS
CONTENTS
01. Chairman’s Address
02. Corporate Overview
03. Directors’ Report
04. Independent Auditor’s Declaration
06. Consolidated Financial Statements
07. Notes to the Consolidated Financial Statements
08. Directors’ Declaration
09. Auditor’s Report
10. Additional Shareholder Information
2
3
5
9
24
26
31
63
65
70
THE GO2 PEOPLE LTDFor personal use only THE GO2 PEOPLE LTD
CHAIRMAN’S ADDRESS
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01
For personal use only CHAIRMAN’S ADDRESS
4
CHAIRMAN’S
ADDRESS
To Our Shareholders,
The 2020 Financial Year has been one of transformation for the Company.
In September 2019 we announced the termination of the IPW proposed acquisition and the abandonment of the
associated capital raising. The Board decided that the best course of action was to streamline and simplify the
underlying business, and as outlined in last year’s Annual Report, “Focus” presentation on 22 October 2019 and
subsequent ASX release on 4 November 2019 we had three clear goals for the 2020 Financial Year:
• To consolidate the core Recruitment & Training business to improve EBITDA performance;
• To undertake a Rights Issue to provide additional working capital; and
• To seek additional working capital support from the Company’s financiers
I am pleased to report that all three of these initiatives have been successfully executed, with:
• The core Recruitment & Training business showing positive normalised EBITDA for the second half;
• The Rights Issue and subsequent Shortfall Offer having successfully raised some $392,000; and
• The announcement on 12 March 2020 of additional two year term to the Company’s finance facility.
In addition, coinciding with the de-scaling of the Company’s Building division, residual assets were liquidated
and issues resolved during the year, including the sale of the Kintyre Camp and the resolution of the
Meadowbrooke Lifestyle Village matter.
The benefit of these rationalisation efforts and the focus on the core Recruitment and Training business
is evident, with the Company now having posted 3 consecutive quarters of positive cashflow generation
from Operations.
Non-Executive Director Mr Dickie Dique retired by rotation at the Company’s 2019 Annual General Meeting, and
the Board extends its thanks on behalf of the Company’s Shareholders for Mr Dique’s Insight and contribution
during his time with GO2. In replacement or Mr Dique on the Board, we welcomed Executive Director, Founder
and major shareholder Paul Goldfinch.
Moving forward, we see a range of exciting opportunities in our core competencies of Recruitment & Training
in our key target markets of mining, construction and infrastructure in WA & Queensland. Structural tailwinds
arising from buoyant mineral commodity markets and government incentives and spending on construction
& infrastructure projects are cause for optimism in our space, and the Company is well placed to capitalise on
these opportunities. In addition, we continue to assess a range of potential merger & acquisition transactions,
and will pursue these where the client & operational synergies are apparent, or where a transaction presents an
opportunity to move into an adjacent client or geographical segment. In any case, only potential transactions
which are clearly EBITDA and cashflow accretive are being considered.
On behalf of the Board, I extend my thanks to Shareholders for their patience as we worked through the
potential IPW acquisition, and now ask for your support as we re-focus and build the underlying business to
capitalise on the exciting range of opportunities we see in the year ahead.
Darren Cooper
Independent Non-Executive Chairman - The GO2 People Ltd
THE GO2 PEOPLE LTDFor personal use only THE GO2 PEOPLE LTD
CORPORATE OVERVIEW
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5
02
THE GO2 PEOPLE LTDFor personal use only CORPORATE OVERVIEW
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CORPORATE DIRECTORY
Directors
Darren Cooper
Independent Non-Executive Chairman
Abilio “Billy” Ferreira
Managing Director
Paul Goldfinch
Executive Director
Company Secretaries
Peter Torre, Matthew Thomson
Registered Office
1/161 Great Eastern Highway,
Rivervale WA 6103
Phone 08 6151 9200
Auditor
William Buck Audit (Vic) Pty Ltd
Level 20, 181 William Street,
MELBOURNE VIC 3000
Australian Securities Exchange
ASX Code Ordinary Shares: GO2
Website
www.thego2people.com.au
Share Registry
Computershare Investor Services Pty Limited
Level 11, 172 St George’s Terrace,
PERTH WA 6000
Phone 1300 557 010
Corporate Governance
A summary of the Company’s compliance with
the 3rd Edition of the ASX Corporate Governance
Recommendations together with current policies
and charters is available on the Company website.
www.thego2people.com.au/investor-
centre/?id=1#1509345233432-4-0
CORPORATE STRUCTURE
THE GO2 PEOPLE LTD
Present
100% owned
subsidiaries
GO2 Skills and
Training Pty Ltd
GO2 Recruitment
Pty Ltd as
trustee for the
GO2 Recruitment
Trust
The GO2 People
Australia Pty Ltd
GO2 Building
Pty Ltd
THE GO2 PEOPLE LTDFor personal use only CORPORATE OVERVIEW
7
THE GO2 PEOPLE LTD
What We Do
The GO2 People is a leading provider of vertically integrated
Recruitment and Building services to industry throughout Australia.
Our day to day operations are underpinned by strong core values and
an ethical approach to business principles which drive innovation,
collaboration and an ongoing commitment to continuous improvement.
Recruitment
The company’s Recruitment Division provides tailored staffing
solutions to a range of industries with a client base that includes
national and multinational blue-chip organisations across the
construction, resources and industrial sectors. The Recruitment
Division delivers two specialist services, labour hire and
professional recruitment.
Industries GO2 provides services to include:
• Major Infrastructure
• Construction
• Mining/Resources
• Electrical/Energy
• Warehousing/Logistics
• Waste Management
Training
GO2 Skills and Training Pty Ltd is a national Registered Training
Organisation (RTO 40927), delivering accredited and
non-accredited workplace training and education to industry
throughout Australia.
INDIGENOUS
TRAINEESHIPS
THE GO2 PEOPLE LTDFor personal use only 8
SUMMARY OF FY20
CONSOLIDATION
STRATEGY
Reduced total operational overhead spending by $4.5m, or 60%, annually
Group’s gross margin as percentage of Revenue increased to 12.5% (from 11%),
Total cashflow positive for the year ended 30 June 2020.
Positive EBITDA achieved for the six months Jan – Jun 20
Positive EBITDA achieved for the full year FY20 (normalised)
Launched Training Division’s first online training course with others under development
Maintained full operational delivery capacity during COVID-19 crisis
THE GO2 PEOPLE LTDFor personal use only THE GO2 PEOPLE LTD
DIRECTORS’ REPORT
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03
For personal use only DIRECTORS’ REPORT
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DIRECTORS’
REPORT
The Directors are pleased to present their report on the consolidated entity (referred to herein as the “Group”)
consisting of The GO2 People Ltd (the “Company”) and its controlled entities for the year ended 30 June 2020.
Director and Company Secretary Details
Abilio “Billy” Ferreira
Shares Held (direct and through related entities)
Options Held
Other directorships of Australian Publicly Listed entities
Darren Cooper
Shares Held (direct and through related entities)
Options Held
Other directorships of Australian Publicly Listed entities
Paul Goldfinch
Shares Held (direct and through related entities)
Options Held
Other directorships of Australian Publicly Listed entities
27,887,976
3,100,000
nil
1,000,000
1,000,000
Spectur Limited
27,527,730
3,100,000
nil
The following persons were directors of The GO2 People Ltd during the reporting period,
but are no longer directors
Andries “Dickie” Dique
Resigned 28 November 2019
The following persons held the position of Company Secretary of The GO2 People Ltd at the end of the
reporting period:
Matthew Thomson
Peter Torre
Information on Directors and Secretaries
Darren Cooper - Independent Non-Executive Chairman
Darren Cooper spent in excess of 20 years with various companies in management and senior executive roles,
and has a Bachelor of Business from Curtin University, a Masters of Applied Finance from Macquarie University,
and is a graduate of the Australian Institute of Company Directors.
He is currently Managing Director of a private consulting business, Board Chair of Spectur Ltd (ASX:SP3),
Deputy Board Chair of Foundation Housing Ltd and a Non-Executive Director of JDSi Consulting Engineers Pty
Ltd and Ocean Gardens Retirement Village Inc.
The Board considers Mr. Cooper to be an independent Director, as he is not an executive member of
management and is free of any interest, position, association or relationship that might influence, or reasonably
be perceived to influence, in a material respect his capacity to bring an independent judgement to bear on
issues before the Board.
THE GO2 PEOPLE LTDFor personal use only
DIRECTORS’ REPORT
11
Abilio “Billy” Ferreira - Managing Director
Billy is a proven senior manager and entrepreneur with a strategic, disciplined and practical approach.
After completing 5 years in the Australian Military in 2000 and undertaking a leadership role in the UK with
London’s exclusive health club, Next Generation, Billy gained valuable experience in construction as the General
Manager of a residential building business in 2005-6 in Adelaide, South Australia. From here, Billy became a part
of the senior management group of the then privately owned, Australian Portable Buildings (APB), in Sydney,
New South Wales.
After a venture capitalist acquisition in 2007, Billy relocated to Perth, Western Australia and become an integral
part of growing the business into a new territory. It was here that Billy was exposed, as a client, to the Labour
Hire industry. Billy co-founded GO2 Recruitment in 2011 with Paul Goldfinch. Billy is a graduate of the company
directors’ course at the Australian Institute of Company Directors.
Mr Ferreira is not considered to be independent due to his executive role as Managing Director of the Company
and his interest in securities in the Company.
Paul Goldfinch - Executive Director - Appointed 14th October 2019
Paul a proven senior executive with 15 years’ experience in the recruitment industry, both in Australia and
overseas. Paul co-founded GO2 Recruitment in 2011 with Billy Ferreira, prior to starting GO2, he held senior
management and business development positions with national and international labour hire providers, during
which time he has developed an intimate understanding of the sector.
Matthew Thomson - Joint Company Secretary
Matthew joined the Company as Chief Financial Officer and Company Secretary in May 2017. Matthew has a
Bachelor of Commerce, Accounting and Finance from the University of New South Wales and is a Chartered
Accountant. Having begun his career at Coopers & Lybrand (now PricewaterhouseCoopers) he has over 15
years’ experience in senior financial and management accounting roles.
Peter Torre - Joint Company Secretary
Peter Torre is the principal of the corporate advisory firm Torre Corporate which provides corporate secretarial
services to a range of listed companies including The GO2 People. Prior to establishing Torre Corporate, Mr
Torre was a partner and Chairman of the National Corporate Services Committee of an internationally affiliated
firm of Chartered Accountants working within its corporate services division for over nine years. Mr. Torre is
the company secretary of several ASX-listed companies, and previously, companies listed on the London and
Toronto Stock Exchange. He is a director of ASX listed Mineral Commodities Ltd, Zenith Energy Limited, VEEM
Ltd and Volt Power Group Ltd. Mr Torre holds a Bachelor of Business, is a Chartered Accountant, a Chartered
Secretary and is a member of the Institute of Company Directors.
Principal Activities
The principal activities of the Group during the reporting period, were the provision of Recruitment, and Training
Services. The Group’s Recruitment Division provides tailored workforce solutions to a range of industries
with a client base that includes a number of national and multi-national blue-chip organisations across the
construction, mining, and industrial sectors.
The Group’s Training Division is a nationally Registered Training Organisation (RTO 40927), delivering workplace
training and education courses.
The Building Division was a multi-disciplinary construction Company. As part of a Company restructure during
H1 FY20, the Building Division was descaled and is only completing existing jobs. There is no new business
being pursued by the division.
THE GO2 PEOPLE LTDFor personal use only 12
Review of Operations
The Group continued to pursue its principal Recruitment and Training activities during the year which included a
significant restructuring of its business operations in Q1 FY20, the key focus of the consolidation strategy being
EBITDA improvement, cashflow positivity and responsible capital management. The beneficial outcomes of this
restructure were evident in H2 FY20. With a renewed focus on the pathway to earnings as opposed to the large-
scale revenue growth model previously pursued, restructuring costs were incurred in H1FY20, predominately
through staff redundancies and organisational changes. This restructuring has resulted in total operational
overhead spending decreasing by $4.5m, or 60%, annually. A far leaner and sustainable business model was
therefore implemented in FY20.
A critical part of the restructure was the descaling of the Group’s Building division to reduce its exposure to the
volatile and capital-intensive building industry. The Company will complete a small amount of existing works
however it retains the capability to deliver small low risk projects for key clients through a project costing
model, if it so chooses, which will not impact its new stable overhead structure. The shift away from building
has allowed the Company to focus on high quality service delivery of its principal activities of recruitment
and training.
Income from the Recruitment activities decreased by 37% to $27.2m for the full year ended 30 June 2020 (as
compared to the full year end 30 June 2019) on the back of restructure and the later impacts of COVID-19.
Pleasingly however, the division’s Gross Margin % increased in FY20 from 10.9% to 12.5%. This was largely due
to a consistent focus on maintaining the highest delivery standards to key customers with greater opportunities
and high profit margins. The Company also implemented additional technology to assist with streamlining the
recruitment and mobilisation of its workforce. Orders from key clients across the Recruitment Division remain
strong and the Company has identified numerous opportunities on the back of tail winds in the mining and
infrastructure sectors which will carry into FY21.
GO2’s Training Division continued to deliver its advanced Leadership and Management training to key
recruitment clients during the first half, whilst expanding its offering to include business to consumer online
training courses. This additional offering, particularly in the mining supervisor space, produced additional
revenue for H2 FY20 and is expected to grow into the FY21. The Training Division has new online courses under
development which will be launched in H1 FY21. GO2 Skills and Training contributed $0.6m in FY20 which was in
line with the prior year, although a reduction in the ability to deliver face to face training due to COVID-19 in H2
FY20 was partially offset by the increased online offering.
In the final quarter of the year, the Company’s businesses adapted swiftly to the challenges presented by
the COVID-19 crisis to maintain full operational delivery capacity. With the benefit of Government assistance,
management remained focused on the consolidation strategy of its core recruitment and training operations
and whilst revenues dipped slightly
during Q4, a leaner business model meant this had no impact on EBITDA positivity. The revenue dip was largely
due to a bottleneck scenario for Companies in the WA mining sector attempting to mobilise personnel to mine
sites. Border closures and less flights to regional areas of WA were the main hurdle however a return to more
‘business as usual’ mobilisation schedules will increase the Company’s ability to get more workers on site.
As noted above, whilst the Group continued to provide Building Services, it is purely the completion of projects
won in the prior period, and as a result revenue from building decreased 45% on the prior year.
The revenue from operations for the year was as follows:
REVENUE
2020 ($)
2019 ($)
From labour hire services
27,217,209
43,449,443
From building services
From training services
1,258,285
607,927
2,385,284
614,806
29,083,421
46,449,533
THE GO2 PEOPLE LTDFor personal use only DIRECTORS’ REPORT
13
12.5% (from 11%), with total gross dollar margins decreased from the prior year corresponding with the
A focus on key clients and relationships has seen the Group’s gross margin as percentage of Revenue increase
to
decrease
in revenue.
Overheads and operating costs have decreased on the prior year, both in total terms and as a percentage of
revenue, through reduced operational head count lower costs.
Operational costs include significant one-off costs incurred in H1 FY20, including:
•
•
$380k of non-recurring payroll related costs. Reductions in staff occurred across all divisions of the
Company in order to structure the business to achieve its revised targets. Whilst the one-off costs relating to
redundancies impacted H1 FY20, importantly, payroll costs decreased by 43% versus FY19.
a net $192k in a bad debt relating to its involvement in the Meadowbrooke Lifestyle Village. The gross bad
debt of $500k was incurred by the Building Division, however the Company was able to progress a claim
against its previous advisors to recover $308k of this loss (after legal fees). For the purposes of the financial
statements, the full impairment of the debt is included in the Corporate and Administration Costs and
recovery is included as Other Income.
•
$80k in relation to mandate and advisory costs following last year’s abandoned acquisition.
The only one-off costs were incurred in H2 FY20 related to the sale, impairment and amortisation of assets in
the building division totalling $170,895.
The impact on the results and EBITDA is as follows
FULL YEAR
30 JUNE 2020 ($)
6 MONTHS TO
30 JUNE 2020 ($)
6 MONTHS
31 DEC 2019 ($)
LOSS AFTER TAX FOR THE YEAR
(1,850,689)
(346,803)
(1,503,886)
Add Back Depreciation and Finance Costs
1,091,362
Non-Cash Option and Rights expense
80,719
620,541
64,285
470,821
16,434
EBITDA
(678,608)
338,023
(1,016,631)
Add Back One-Off Costs
Redundancy and Payroll Costs
Impairment of Building Debts
379,971
500,000
-
-
Less Settlement of Legal Claim
(307,208)
(307,208)
Transaction mandate
Loss from associates – noncore
business
106,758
36,307
32,871
36,307
379,971
500,000
-
73,887
-
NORMALISED EBITDA
37,220
99,993
(62,773)
THE GO2 PEOPLE LTDFor personal use only
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Associates
In line with its strategic plan the Group also invested in two Indigenous-owned businesses based in Western
Australia during FY19. Indigi Personnel Services Pty Ltd is a recruitment business that focuses on the provision
of Indigenous workforce personnel to the mining and construction sectors, whilst Giraffe Australia Pty Ltd
(trading as Core FM) focuses on facilities management and maintenance services across Western Australia.
Neither business contributed materially to the results of 2020, however the initial integration has now been
completed and the Group expects both businesses to contribute positively to the Group’s results in FY21.
Tax Losses
Deferred tax assets relating to unused tax losses of $2,472,372 (@ 27.5%) have not been recognised as at 30
June 2020. The losses have not been brought to account as it is not probable that they will be recovered in
the next 12 months. However, it is expected over the longer term these losses have value and will be utilised by
the Group.
Cashflows
Total cash at bank increased by $335k for the year. $3m of positive operational cashflows were recorded as the
debtor book was reduced (collected) over the year, these inflows more than offset the outflows in recruitment
costs which have reduced year on year. Operational cashflows were utilised to pay down the working capital
facility with Scottish Pacific (BFS) Pty Ltd (“Scottish Pacific”). The facility with Scottish Pacific is used to
provide ongoing working capital support to the Group, with significant payroll and on-costs being paid weekly,
whilst debtor collections average 35 days. It is expected that as the debtor book grows in FY21 there will be an
increase in the utilisaton of this working capital facility. Under the terms of the facility the debts are assigned
(not sold) to Scottish Pacific, and as such the facility is deemed a Financing activity for the purposes of the
cashflow statement.
Significant Changes in State of Affairs
Other than as discussed with respect to the Building division, there were no significant changes in the state of
affairs of the Group during or since the end of the reporting period.
Dividends
No dividends were paid or declared during the year.
Matters Arising since the end of the reporting period
Other than reported elsewhere in this report, there has been no other significant events after reporting period.
Environmental Legislation
The Group’s operations are not subject to significant environmental regulation under the laws of the
Commonwealth and State. Despite this the Group has established procedures to assess and monitor compliance
with any applicable environmental legislation.
Likely developments and expected results
Noting the uncertain impact of the continuing COVID-19 pandemic, the Group expects its operations to continue
across both its Recruitment and Training Divisions. With easing of restrictions in WA there is increasing demand
for Labour Hire. The closure of the WA borders is providing opportunities for the Skills division to provide
services to clients and candidates to take up roles vacated by eastern states FIFO workers. QLD is also seeing
an increase in demand as restrictions are eased. The company has very limited exposure to the VIC market so
continued restrictions in this state are unlikely to negatively impact the group. The continuation of Government
incentives through the September 2020 quarter and potentially into the December 2020 quarter will also
provide additional support should it be required.
THE GO2 PEOPLE LTDFor personal use only 15
Remuneration Report (Audited)
The Directors present the Remuneration Report (the Report) for the Group for the period ended 30 June 2020.
This Report forms part of the Director’s Report and outlines the remuneration arrangements of the Group’s key
management personnel (KMP) in accordance with the requirements of the Corporations Act 2001 (the Act) and
its regulations. This information has been audited as required by section 308 (3C) of the Act.
Introduction
For the purposes of this Report, KMP of the Group are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly,
including any Director (whether executive or otherwise) of the Parent Company and include Executive and Non-
Executive Directors.
Unless otherwise indicated, the following individuals were KMP for the entire financial period:
Current Directors
Abilio Ferreira – remunerated through employment contract and director fees
Darren Cooper – remunerated through director agreement only
Paul Goldfinch – remunerated from appointment on the 14th October 2019 through director agreement and a
consulting agreement with respect to the Group’s Skills and Training division.Previous Directors
Andries “Dickie” Dique – remunerated through director agreement only up until resignation on
28 November 2019.
Management
Matthew Thomson (CFO and Joint Company Secretary) – remunerated through employment contract
Peter Torre (Joint Company Secretary) – remunerated through services contract
Ross Lovell (EGM Recruitment) – remunerated through employment contract
Previous Key Management
Chris Streat (Head of Building) - remunerated through employment contract up until resignation on 16
December 2019.
Remuneration Governance
The Group’s Remuneration and Nomination Committee ensures a clear link between performance and
remuneration. This is achieved by a combination of fixed remuneration, short term incentives (STI) and
long-term incentives (LTI) with appropriate performance-based hurdles which reflect short and long- term
performance of the executives and the Group. For the executive management, the Board approves the
remuneration arrangements as recommended by the Managing Director.
In making remuneration decisions the Board, assess the appropriateness of the nature and amount of
remuneration on a periodic basis by reference to the status of the Group and the growth of its revenue and
EBITDA, the skill sets required, trends in comparative ASX listed companies and the need for a balance between
fixed remuneration and short and long- term cash and non-cash incentives. The process includes a review of
Group and individual performances, broad market remuneration data and relevant comparative remuneration
externally and internally. For the current period the Board has not utilised any services of remuneration
consultants but acknowledges that in the future this resource would be beneficial to provide additional support
to the remuneration decisions.
Remuneration Policy
Remuneration packages for executives include fixed remuneration with bonuses or equity-based remuneration
entirely at the discretion of the Board, in applying the board’s discretion the board takes into account industry
practice, benchmark remuneration against industry salaries and have reference to Company performance and
seek shareholder approval where required.
Non-Executive Directors receive fees agreed on an annual basis by the Board. Payments of Directors’ fees are
in addition to any payments to Directors in any employment capacity. A Director may also be paid fees or other
amounts as the Directors determine, if a Director performs special duties or otherwise performs duties outside
the scope of the normal duties of a Director. A Director may also be reimbursed for out of pocket expenses
incurred as a result of their directorship or any special duties.
THE GO2 PEOPLE LTDFor personal use only 16
Remuneration Policy vs Financial Performance
The Company’s policy is to remunerate based on industry practice and benchmark industry salaries rather than
purely on performance as this takes into account the risk assumed by the directors and executives as a result of
their involvement in a listed entity.
Director Fee Arrangements
Remuneration Structure
The structural component of Non-Executive Director (NED) fees is separate and distinct from executive
remuneration. It is designed to attract and retain Directors of the highest calibre who can discharge the
roles and responsibilities required in terms of good governance, whilst incurring a cost that is acceptable to
shareholders.
Fee Policy
The remuneration of NEDs consists of Directors’ fees and is adjusted for the chair role.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined
from time to time by a general meeting. The Company’s Constitution provides for the initial aggregate
remunerations to be set at $500,000.
The table below summarises the annual fees payable to NEDs for the 2020 financial year (inclusive of
superannuation):
BOARD FEES
Non Executive Chair
NED
TOTAL ($)
82,125
60,225
NEDs may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs.
THE GO2 PEOPLE LTDFor personal use only 17
Employment Details of Current Members of Key Management Personnel
The following table provides employment details of persons who as at 30 June 2020 are members of KMP of
the consolidated group.
DIRECTOR
POSITION HELD
CONTRACT DETAILS
Darren Cooper
Chairman
Subject to the Company’s constitutional rules on
retirement and re-election of Directors.
Paul Goldfinch
Executive Director
Subject to the Company’s constitutional rules on
retirement and re-election of Directors.
Abilio Ferreira
Managing Director
Andries Dique
Non-Executive Director
Contracted from 1 June 2017, subject to normal
commercial conditions, no fixed term, three months’
notice required to terminate. Total remuneration
$307,969 (inclusive of superannuation) plus provision
of a Company owned vehicle.
Subject to the Company’s constitutional rules on
retirement and re-election of Directors. Andries Dique
resigned on 28 November 2019.
MANAGEMENT
POSITION HELD
CONTRACT DETAILS
Matthew Thomson
CFO and Joint Company
Secretary
Peter Torre
Joint Company Secretary
Ross Lovell
EGM Recruitment
Chris Streat
Head of Building
Contracted from 4 May 2017, no fixed term, subject
to normal commercial conditions, 1-month notice
required to terminate. Total remuneration $202,575
(inclusive of superannuation) plus provision of a
Company owned vehicle.
Services agreement entered into on 30 June 2017,
subject to normal commercial conditions, 1-month
notice required to terminate.
Contracted from 17 July 2017, subject to normal
commercial conditions, no fixed term, 1-month notice
required to terminate. Total remuneration $251,850
(inclusive of superannuation) plus provision of a
Company owned vehicle.
Contracted from 1 June 2017, subject to normal
commercial conditions, 1-month notice is required to
terminate. Total remuneration $219,000 (inclusive of
superannuation) plus provision of a Company owned
vehicle. Chris Streat was made redundant on 16
December 2019.
THE GO2 PEOPLE LTDFor personal use only 18
Details of Remuneration for Period Ended 30 June 2020
The following table of benefits and payments details, in respect to the financial period, the components of
remuneration for each member of the key management personnel of the consolidated Group:
SHORT TERM BENEFITS
POST-
EMPLOYMENT
SHARE BASED
REMUNERATION
TOTAL
SALARY &
FEES
STI CASH
BONUSES
NON-
MONETARY
BENEFITS
SUPERANNUATION
CONTRIBUTION
OPTIONS(1)
PERFORMANCE
RIGHTS
TOTAL
Darren
Cooper
Abilio
Ferreira
Paul
Goldfinch(3)
Andries
Dique
Peter
McMorrow(1)
Subtotal –
Directors
Matthew
Thomson
Peter Torre
Ross Lovell
Christopher
Streat
Subtotal –
Management
Total
2020
63,000
2019
68,750
2020
281,250
2019
300,000
2020
153,981
2019
200,000
2020
20,075
2019
60,225
2020
-
2019
55,206
2020
518,306
2019
684,181
2020
185,000
2019
185,000
2020
39,000
2019
39,000
2020
230,000
2019
230,000
2020
150,889
2019
200,000
2020
604,889
2019
654,000
2020
1,123,195
2019
1,338,181
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,125
-
13,375
11,829
21,154(4)
26,719
30,186(4)
28,500
(8,107)(4)
5,481
8,107(4)
19,000
-
-
-
-
-
-
-
-
13,047
51,324
-
-
-
-
-
7,885
-
7,885
-
38,293
60,875
27,599
-
-
-
-
-
-
-
-
-
-
-
-
82,125
93,954
329,123
358,686
151,355
227,107
20,075
68,110
-
63,091
582,678
810,948
6,404(4)
12,343(4)
-
-
3,538(4)
17,059(4)
(17,222)(4)
17,575
17,575
-
-
21,850
21,850
9,135
17,222(4)
19,000
(7,280)
48,560
46,624
58,425
5,767
99,884
-
-
-
-
-
-
-
-
-
-
-
15,000
223,979
-
-
-
214,918
39,000
39,000
15,000
270,388
-
-
-
268,909
142,802
236,222
30,000
676,169
-
759,049
30,000
1,258,846
84,917
119,300
27,599
-
1,569,997
(1) Peter McMorrow resigned FY2019 and was not remunerated during FY2020.
(2) Payments were made to Andries Dique prior to his resignation on 28 November 2019.
(3) Payments were made to Paul Goldfinch, through salary and wages, director fees and through a consulting agreement. Paul Goldfinch
was remunerated through an employment services contract for his role as Head of Investor Relations and Growth with an annual salary
of $219,000 (including benefits). This contract was terminated during September 2019. Upon appointment as a director on 14 October
2019 Paul was paid a director’s fee in line with the agreed amount for NEDs. To further enhance the Company’s online training presence, a
consulting agreement has been entered into with Paul. The following are the key terms of this agreement
• Term: Ends 31 December 2020
• Fees: Maximum $3,011 per week based on minimum performance milestones of 19 candidates per week.
• Termination: The Company may terminate if minimum milestones are not met for 3 consecutive weeks.
(4) Provision for short term Annual Leave benefit, no person has qualified for any Long Service Leave benefits
(5) Payments were made to Chris Streat prior to his redundancy on 16 December 2019.
THE GO2 PEOPLE LTDFor personal use only 19
The proportion of remuneration linked to performance and the fixed proportion are as follows:
NAME
FIXED
REMUNERATION
AT RISK – STI
AT RISK – LTI
2020
2019
2020
2019
2020
2019
NON-EXECUTIVE DIRECTORS
Darren Cooper
100%
100%
EXECUTIVE DIRECTORS
Abilio Ferreira
100%
100%
-
-
Paul Goldfinch
85%
-
15%
MANAGEMENT
Matthew Thomson
100%
100%
Peter Torre
Ross Lovell
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Long Term Incentives (LTI)
The Company has two LTI plans in operation for the period ended 30 June 2020, both of which were issued
in prior periods. The LTIs are a combination of incentive options and performance rights as part of total
remuneration. The grant of the incentive options and performance rights is designed to:
(a) reward management and executives them for the significant efforts they have put into the growth of the
Group; and
(b) encourage the participating management and executives to have a greater involvement in the achievement
of the Company’s objectives and to provide an incentive to strive to that end by participating in the future
growth and prosperity of the Company through share ownership.
A total of 1,750,000 options were granted to directors on 29 November 2018 pursuant to the approval at the
Company’s AGM on 29 November 2018. These options which vested immediately are exercisable at $0.30
each, on or before 17 December 2021 and are included as Class B options. There are no conditions to exercise.
The options were valued at the time using the Black-Scholes Model with a spot rate of 2 cents, a risk-free rate
of 1.9% p.a. with volatility set at 50% and a dividend yield of 0%. No options have been issued in the current
period as LTI’s.
2019 Annual General Meeting
At the Company’s Annual General Meeting on 28 November 2019, a resolution was put to the meeting to
approve the adoption of the remuneration report as contained in the Company’s annual financial report for the
financial year ended 30 June 2019. This resolution received more than 25% votes against the Remuneration
Report, and as such, the Company has recorded its first strike in accordance with the Corporations Act 2001.
Following the 2019 AGM the Company has reviewed the remuneration of KMPs and all employees under its
general strategic review of operations to reduce overheads. Certain amendments were made as a result of this
and the Board is of the view that the level of remuneration for KMP’s remaining is commensurate with their level
of service and comparable to market rates. The Company also implemented an Incentive Performance Rights
Plan under which certain employees were offered Performance Rights subject to certain vesting conditions as
disclosed elsewhere in this report.
Other Transactions with Key Management Personnel
There have been no transactions involving equity instruments. Please refer to Note 20 of the Financial
Statements for additional information on related party transactions.
THE GO2 PEOPLE LTDFor personal use only 20
KMP Shareholdings
Number of shares held (either directly or through beneficial ownership) by each KMP of the Group during the
period is as follows:
BALANCE
ISSUED /
PARTICIPATION
PURCHASE
SALE OF
MOVEMENT
DIRECTOR
BALANCE 30
1 JULY 2019
GRANTED
IN RIGHTS
OF SHARES
SHARES
OF SHARES
RESIGNA-
JUNE 2020
DURING THE
PERIOD
ISSUE
ON MARKET
ON
OFF MARKET
TION
MARKET
Darren Cooper
500,000
Cooper
Retirement Pty
Ltd
-
Andries
Dique(1)
450,000
Abilio Ferreira
27,887,976
Matthew
Thomson
100,000
ThomKid Pty
Ltd
Peter Torre
-
Ross Lovell
200,000
Ross &
Nicola Lovell
67,277
Paul Goldfinch
27,527,730
-
-
-
-
-
-
-
-
-
-
500,000
-
-
-
-
-
-
-
-
-
-
-
-
625,000
-
(10,000)
-
200,000
67,277
-
-
-
-
-
-
-
-
-
-
(1,000,000)
-
-
-
1,000,000
-
1,000,000
-
(450,000)
-
-
-
-
-
-
-
-
- 27,887,976
-
-
-
-
-
100,000
785,000
-
400,000
134,554
- 27,527,730
(1) Andries Dique resigned on 28 November 2019
KMP Option Holdings
Number of options held (either directly or through beneficial ownership) by each KMP of the Group during the
period is as follows:
BALANCE
ISSUED / GRANTED
OPTIONS
DIRECTOR
BALANCE
1 JULY 2019
DURING THE
EXERCISED
RESIGNATION
30 JUNE 2020
PERIOD
DURING THE YEAR
Abilio Ferreira
3,100,000
-
Matthew Thomson
350,000
312,500
Ross Lovell
350,000
133,639
Paul Goldfinch
3,100,000
-
Darren Cooper
750,000
250,000
Andries Dique (1)
500,000
-
-
-
-
-
-
-
-
-
-
-
-
3,100,000
662,500
483,639
3,100,000
1,000,000
(500,000)
-
(1) Andries Dique resigned on 28 November 2019. As at 30 June 2020 all options were fully vested.
Options issued / granted during the period, were the attaching options in respect of the monies committed to
the capital raise.
THE GO2 PEOPLE LTDFor personal use only 21
Performance Rights
Abilio Ferreira
Matthew Thomson
Ross Lovell
Paul Goldfinch
Darren Cooper
Andries Dique (1)
BALANCE
1 JULY 2018
ISSUED / GRANTED
DURING THE
PERIOD
EXERCISED DURING
THE YEAR
BALANCE
30 JUNE 2020
-
-
-
-
-
-
-
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
-
-
-
(1) Andries Dique resigned on 28 November 2019
During the year, 5,000,000 Performance Rights were issued to a number of key employees, with the vesting
condition being the continuation of employment up and until 1 July 2020, at which time the Rights will fully
vest. The cost of the Rights was expensed evenly each month from the issue date to the date the Performance
Rights fully vested. The valuation of the Rights was based on the Black Scholes Model using a spot price at issue
of $0.015, a risk-free rate of 0.92% p.a., market volatility of 75% and a dividend yield of 0%. Due to the short
vesting period it is assumed 100% of the Rights will be exercised.
End of Remuneration Report
THE GO2 PEOPLE LTDFor personal use only 22
Directors meetings
During the financial year, twelve meetings of Directors were held. Attendances by each director during the year
based on their eligibility were as follows:
DIRECTOR
BOARD MEETINGS
REMUNERATION
AND NOMINATION
COMMITTEE
AUDIT AND RISK
COMMITTEE
Held
Attended
Held
Attended
Held
Attended
Billy Ferreira
Darren Cooper
Paul Goldfinch
Dickie Dique
12
12
9
4
12
12
9
4
-
-
-
-
-
-
-
-
2
2
1
1
2
2
1
1
Options
At the date of this report, the unissued ordinary shares of The GO2 People Ltd under option are as follows:
GRANT DATE
DATE OF EXPIRY
EXERCISE PRICE
NUMBER OF OPTIONS
21 June 2017
21 June 2021
$0.225
2,500,000
21 June 2017
21 June 2021
21 June 2017
21 June 2021
18 December 2018
17 December 2021
29 November 2019
29 January 2021
12 February 2020
29 January 2021
$0.30
$0.40
$0.30
$0.04
$0.04
5,000,000
7,500,000
1,750,000
9,025,497
3,075,950
28,851,447
Option holders do not have any rights to participate in any issues of shares or other interests in the Group or the
Company or any other entity.
Performance Rights
At the date of this report, the unissued ordinary shares of The GO2 People Ltd related to performance rights as
follows:
GRANT DATE
DATE OF EXPIRY
EXERCISE PRICE
NUMBER OF
PERFORMANCE RIGHTS
26 November 2019
31 December 2020
-
5,000,000
5,000,000
THE GO2 PEOPLE LTDFor personal use only 23
Performance Rights holders do not have any rights to participate in any issues of shares or other interests in the
Group or the Company or any other entity.
Indemnities and Insurance Premiums Paid
Effective 1 October 2018, the Group paid and continues to pay for a policy to insure all past, present and future
Directors against liabilities for costs and expenses incurred by them in defending legal proceedings arising from
their conduct while acting in the capacity of Directors of the Group, other than conduct involving a wilful breach
of a duty in relation to the Group. The provision of details in respect of the terms and conditions of the policy
are prohibited from disclosure under the terms of the policy.
The Group has executed Indemnity, Insurance and Access Deeds with Messers Ferreira, Cooper and Goldfinch.
These agreements indemnify the Directors of the Group for costs incurred, in their capacity as a director, for
which they may be held personally liable, expect where there is a lack of good faith.
Additional information
The earnings of the consolidated entity for the three years to 30 June 2020 are summarised below:
Revenue
EBITDA*
EBIT
2020
2019
2018
29,083,421
46,449,533
45,074,653
(678,608)
(2,121,859)
(976,354)
(1,508613)
(2,495,834)
(1,257,011)
Profit after income tax
(1,850,689)
(3,588,144)
(1,344,927)
* EBITDA Excludes share based payments
Proceedings on behalf of the Group
No person is bringing proceedings on behalf of the Group.
Non-audit services
There were no non-audit services provided by William Buck during the year.
Auditors Independence
The auditor’s (William Buck (Vic) Pty Ltd) independence declaration for the year ended 30 June 2020 has been
received and is attached to this Directors’ Report.
This Directors’ Report is signed in accordance with a resolution of the Board of Directors.
Darren Cooper
Company Chair – The GO2 People Ltd
28 August 2020
THE GO2 PEOPLE LTDFor personal use only
THE GO2 PEOPLE LTD
DIRECTORS REPORT
INDEPENDENT AUDITOR’S DECLARATION
24
24
04
THE GO2 PEOPLE LTDFor personal use only 25
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF THE GO2 PEOPLE LTD
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Melbourne, 28 August 2020
For personal use only
THE GO2 PEOPLE LTD
CONSOLIDATED FINANCIAL STATEMENTS
26
26
05
THE GO2 PEOPLE LTDFor personal use only CONSOLIDATED FINANCIAL STATEMENTS
27
CONSOLIDATED
FINANCIAL
STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020
Revenue
Cost of sales/services
GROSS PROFIT
Other Income
NOTE
2020 ($)
2019 ($)
4
5
6
29,083,421
46,449,533
(25,428,974)
(41,349,925)
3,654,447
5,099,608
679,863
81,440
Selling and marketing expenses
(82,929)
(155,279)
Employee benefits expense
(3,380,714)
(5,941,914)
Corporate and administration expenses
(1,593,687)
(1,205,714)
Share of loss of associates accounted for using equity method
(36,307)
(19,597)
LOSS BEFORE FINANCE COSTS,
DEPRECIATION AND INCOME TAX
Finance costs
Depreciation and amortisation expenses
LOSS BEFORE INCOME TAX
Income tax expense
LOSS FOR THE YEAR
5
5
7
(759,327)
(2,141,456)
(342,076)
(600,081)
(749,286)
(354,378)
(1,850,689)
(3,095,915)
-
(492,229)
(1,850,689)
(3,588,144)
Other comprehensive loss, net of tax
-
-
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(1,850,689)
(3,588,144)
LOSS PER SHARE
Basic / diluted loss per share
18(c)
(1.4) cents
(3) cents
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
THE GO2 PEOPLE LTDFor personal use only
CONSOLIDATED FINANCIAL STATEMENTS
28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS
AT 30 JUNE 2020
NOTE
2020 ($)
2019 ($)
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Other financials assets
Assets held for sale
TOTAL CURRENT ASSETS
Non-Current Assets
Plant and equipment
Right of use assets
Investments accounted for using equity method
Intangible assets
Loans to associates
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Employee Benefits
Lease liabilities
Borrowings
TOTAL CURRENT LIABILITIES
Non-Current Liabilities
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY / (DEFICIENCY)
8
9
10
11
12
14
13
20
20
15
16
17
16
18
19
1,274,113
4,484,131
391,655
156,843
79,136
938,804
9,027,101
632,467
156,878
-
6,385,878
10,755,250
95,606
473,647
105,589
481,519
48,546
990,356
-
141,896
552,019
-
1,204,907
1,684,271
7,590,785
12,439,521
3,893,981
259,898
345,801
5,130,101
226,500
263,193
3,138,405
5,176,918
7,638,085
10,796,712
89,096
89,096
288,427
288,427
7,727,181
11,085,139
(136,396)
1,354,382
16,164,644
15,858,288
1,689,019
1,608,300
(17,990,059)
(16,112,206)
(136,396)
1,354,382
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
THE GO2 PEOPLE LTDFor personal use only CONSOLIDATED FINANCIAL STATEMENTS
29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
ISSUED
CAPITAL ($)
ACCUMULATED
LOSSES ($)
SHARE BASED
PAYMENTS
RESERVE ($)
TOTAL EQUITY
(DEFICIENCY)
($)
AT 1 JULY 2019
Note
15,858,288
(16,112,206)
1,608,300
1,354,382
Adjustment for change in
accounting standards
1
-
(27,164)
(27,164)
Restated Opening Balance
15,858,288
(16,139,370)
1,608,300
1,327,218
Loss for the year
-
(1,850,689)
-
(1,850,689)
TOTAL COMPREHENSIVE INCOME
TRANSACTION WITH OWNERS IN THEIR CAPACITY AS OWNERS
Issue of shares
18(a)
399,777
Vesting of share-based
payments
-
Share issue costs
18(a)
(93,421)
-
-
-
-
399,777
80,719
80,719
-
(93,421)
AT 30 JUNE 2020
16,164,644
(17,990,059)
1,689,019
(136,396)
ISSUED
CAPITAL
ACCUMULATED
LOSSES
SHARE BASED
PAYMENTS
RESERVE
TOTAL EQUITY
AT 1 JULY 2018
15,858,288
(12,524,062)
1,580,701
4,914,927
Loss for the year
TOTAL COMPREHENSIVE INCOME
TRANSACTION WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Vesting of share-based payments
Share issue costs
-
-
-
(3,588,144)
-
(3,588,144)
-
-
27,599
27,599
-
-
AT 30 JUNE 2019
15,858,288
(16,112,206)
1,608,300
1,354,382
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
THE GO2 PEOPLE LTDFor personal use only CONSOLIDATED FINANCIAL STATEMENTS
30
CONSOLIDATED STATEMENT OF CASH FLOWS FOR
THE YEAR ENDED 30 JUNE 2020
NOTES
2020 ($)
2019 ($)
OPERATING ACTIVITIES
Receipts from customers and other sources
34,218,821
55,400,358
Payments to suppliers, employees and GST
(30,861,880)
(54,188,873)
Finance costs paid
(342,076)
(600,081)
NET CASH GENERATED FROM OPERATING ACTIVITIES
8
3,014,865
611,404
INVESTING ACTIVITIES
Purchase of plant and equipment
(15,359)
(126,445)
Investment in term deposit
Purchase of intangible assets
Payments for investments acquired
-
-
-
(50,244)
(25,045)
(161,431)
Granting of loans to an associate
(41,780)
(6,046)
Proceeds from sale of plant and equipment
156,000
172,000
NET CASH GENERATED FROM / (USED IN) INVESTING ACTIVTIES
98,861
(197,211)
FINANCING ACTIVITIES
Repayment of borrowings
Repayment of lease liabilities
Proceeds received from the issue of share capital
Payment of share issue costs
(2,765,963)
(1,648,803)
(356,996)
(438,065)
398,778
(54,236)
-
-
NET CASH USED IN FINANCING ACTIVITIES
(2,778,417)
(2,086,868)
Net increase in cash held
335,309
(1,672,675)
Cash and cash equivalents at the beginning of the period
938,804
2,611,479
Cash and cash equivalents at the end of financial period
1,274,113
938,804
RECONCILIATION OF CASH
Cash at the end of the period consists of
Cash at bank and on hand
1,274,113
938,804
Cash at bank and on hand
8
1,274,113
938,804
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying note.
THE GO2 PEOPLE LTDFor personal use only THE GO2 PEOPLE LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31
31
06
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32
NOTES TO THE
CONSOLIDATED FINANCIAL
STATEMENTS FOR THE
YEAR ENDED
30 JUNE 2020
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GO2 People Ltd is a for-profit listed public Company incorporated and domiciled in Australia.
(a) Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also
comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board (‘IASB’).
Principles of Consolidation
The consolidated financial statements cover GO2 People Ltd (Company) and the entities it controlled
(Group) at the end of or at any time during the period ended 30 June 2020. A list of controlled entities is
included in Note 20.
Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. The Group re-
assesses whether it controls and entity if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Specifically, the Group controls an entity if and only if the Group has
all the following:
•
•
•
Power over the entity (i.e. existing rights that give it the current ability to direct the relevant activities of
the entity);
Exposure, or rights, to variable returns from its involvement with the entity; and
The ability to use its power over the entity to affect its returns
Going Concern
During the year, the Consolidated Group generated a loss after tax of $1,850,689 (30 June 2019:
$3,588,144), is reporting a net working capital deficiency of $1,252,207 (30 June 2019: $41,462), but has
incurred net cash inflows from operations of $3,014,865 (30 June 2019 $611,404). As at 30 June 2020, the
Group had $1,274,113 in cash (30 June 2019: $938,804) and consolidated net asset deficiency of $136,396
(30 June 2019: net assets 1,354,382).
To achieve the Group’s objectives, ensure its continuing viability and its ability to continue as a going
concern and to meet its debts and commitments as they fall due, the Board of Directors of the Group is
continuing to pursue the following strategies:
THE GO2 PEOPLE LTDFor personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
33
• The Group expects to continue to keep expenditure to a minimum, noting the significant reduction
in operating costs in the financial year, with a significant part of the loss for the year due to the
implementation of cost reduction measures in the NSW & WA recruitment offices and in the Building
Division. The Group will continue to monitor operating costs to identify if further reductions need to be
implemented. As such, the level of operating expenditure in FY21 is expected to be less than FY20.
• The Board believes it has the ability to raise additional capital, and will engage with interested parties
and shareholders on capital raising efforts at the appropriate time;
• The Group continues to engage with its working capital providers who may be able to provide
additional advances.
• There financial statements do not include any adjustments to the recoverability or classification of
recorded asset accounts or to the classification of liabilities, which might be necessary should the Group
not be able to continue as a going concern
(b) Income Tax
The income tax expense (benefit) for the period comprises current income tax expense (income) and
deferred tax expense (income).
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the period as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of
profit or loss when the tax relates to items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an
asset or liability where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates and
joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal
of the temporary difference can be controlled and it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of
set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur
in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
Tax losses related to the current financial year and historical tax losses have not been recognised following
the loss made by the company this year as there is an expectation that these loses will not be utilised in
the short term.
(c) Plant and Equipment
Plant and equipment
Plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated
depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment
is greater than the estimated recoverable amount, the carrying amount is written down immediately to
the estimated recoverable amount. A formal assessment of recoverable amount is made when impairment
indicators are present.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the entity and the cost of the item can be measured reliably. Repairs and maintenance are charged to
profit or loss during the financial period in which they are incurred.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34
Depreciation
The depreciable amount of all plant and equipment are depreciated on a diminishing value basis over
the asset’s useful life to the Group commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated
useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
CLASS OF PLANT AND EQUIPMENT
DEPRECIATION RATE
Plant and Equipment
Motor Vehicle
Office Equipment
Computer Equipment
Minor Equipment
20% - 50%
25%
20% - 66.66%
33.33%
33% - 50%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals
are determined by comparing proceeds with the carrying amount. These gains or losses are recognised in
profit or loss when the item is derecognised.
(d) Intangible Assets
Intangibles other than goodwill
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured
at their fair value at the date of acquisition. Intangible assets acquired separately are initially recognised
at cost. Indefinite life intangible assets are not amortised and are subsequently measured at the cost less
any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any
impairment. The gains or losses recognized in the profit and or loss arising from the derecognition of the
intangible asset are measured as the difference between the disposal proceeds and the carrying amount of
the intangible asset. The method and useful of finite life intangible assets are reviewed annually. Changes
in the expected pattern of consumption of useful life are accounted for prospectively by changing the
amortisation method or period.
Patents and Intellectual Property
Patents and Intellectual Property are initially recognised at cost of acquisition, they have an indefinite
useful life.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested
annually for impairment, or more frequently if events or changes in circumstances indicate that it might
be impaired and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are
taken to profit or loss and are not subsequently reversed.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
35
(e) Leases
AASB 16 – Leases (“AASB 16”)
The Group has adopted AASB 16 from 1 July 2019. This standard replaces AASB 117 “Leases” and for leases
eliminates the classification of operating leases and finance leases. Except for short-term leases and leases
of low value assets, right of use assets and corresponding lease liabilities are recognised in the statement
of financial position. Straight-line operating lease expense recognition is replaced with a depreciation
charge for the right-of-use assets (including operating costs) and an interest expense on the recognised
lease liabilities (included in finance costs). In the earlier period of the lease, the expense associated with
the lease under AASB 16 will be higher when compared to the lease expense under AASB 117. However,
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation results improve as the operating
expense is now replaced by interest expense and depreciation in profit or loss. For classification with the
statement of cash-flows, the interest portion is disclosed in operating activities and the principle portion of
the lease payments are separately disclosed in the financing activities. For lessor accounting, the standard
does not substantially change how a lessor accounts for leases.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable; any
lease payment made at or before the commencement date net of any lease incentives received, any initial
direct costs incurred, and except where included in the cost of inventories, an estimate of costs expected
to be incurred for dismantling and removing the underlying asset and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. When the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of-
use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with a term of 12 months or leases of low-value assets. Lease payments on these assets are
expenses to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payment to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Lease payments comprise of fixed payments, less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid
under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities
are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used,
residual guarantees, lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the following right-of-use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
Impact of adoption – calculation of operating leases on inception of AASB 16
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not
been restated. The impact of adoption on opening retained profits at 1 July 2019 was as follows.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
36
IMPACT OF ADOPTION CONTINUED
ASSETS
Right of Use Assets
Plant and equipment
TOTAL ASSETS
LIABILITIES
Lease liabilities – current
Lease liabilities – non-current
TOTAL LIABILITIES
TOTAL ADJUSTMENTS TO EQUITY
Retained earnings
The lease liabilities as at 1 July 2019 can be reconciled to the operating lease
commitments as of 30 June 2019 as follows:
Operating lease commitments at 30 June 2019
Weighted average incremental borrowing rate at 1 July 2019
Discounted operating lease commitments at 1 July 2019
Finance lease commitments at 30 June 2019
LEASE LIABILITIES AT 1 JULY 2019
($)
765,450
(414,359)
351,091
250,268
127,987
378,255
(27,164)
398,164
5.25%
378,256
551,620
929,876
(f) Short-Term Employee Benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee
benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12
months after the end of the annual reporting period in which the employees render the related service,
including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted)
amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages and salaries are recognised as a
part of current trade and other payables in the statement of financial position.
(g) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
37
(h) Revenue and Other Income
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the Group: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue
when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the ‘expected value’ or ‘most likely amount’
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to
the constraining principle are recognised as a refund liability.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on
either a fixed price or an hourly rate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(i) Finance Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure
on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing
costs are recognised in profit or loss in the period in which they are incurred.
(j) Trade and Other Receivables
Trade and other receivables include amounts due from customers for services performed in the ordinary
course of business. Receivables expected to be collected within 12 months of the end of the reporting
period are classified as current assets. All other receivables are classified as non-current assets.
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days. Other receivables are recognised at amortised cost, less any allowance
for expected credit losses.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
38
(k) Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain
unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts
normally paid within 30 days of recognition of the liability.
(l) Other financial assets
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all of a financial asset, it’s carrying value is
written off.
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the Group’s assessment at the end of each reporting period as to
whether the financial instrument’s credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a
12-month expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset’s lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit
or loss.
(m) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to, the ATO are presented as operating cash
flows included in receipts from customers or payments to suppliers.
(n) Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
(o) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
39
(p) Share-based payments
Share-based compensation benefits are provided to employees in accordance with the Company’s
long-term incentive plan. Equity-settled share-based payments to employees and others providing
similar services are measured at the fair value of the equity instruments at the grant date. The fair value
determined at the grant date of the equity settled share-based payments is expensed on a straight line
basis over the expected vesting period, based on the Group’s estimate of equity instruments that will
eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group
revises its estimate of the number of equity instruments expected to vest. The impact of the revision of
the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to the options/performance rights reserve. Equity-
settled share-based payment transactions with parties other than employees are measured at the fair value
of the goods or services received, except where that fair value cannot be estimated reliably, in which case
they are measured at the fair value of the equity instruments granted, measured at the date the entity
obtains the goods or the counterparty renders the service.
(q) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of The GO2 People
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(r) Assets held for sale
Non-current assets and other assets are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. They are measured at the lower
of their carrying amount and fair value less costs of disposal. For non-current assets or other assets to be
classified as held for sale, they must be available for immediate sale in their present condition and their
sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and
other assets to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair
value less costs of
disposal of a non-current assets and other assets, but not in excess of any cumulative impairment loss
previously recognised.
Assets classified as held for sale are presented separately on the face of the statement of financial position,
in current assets.
(s) Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
40
(t) Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method,
the share of the profits or losses of the associate is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. Investments in associates are carried
in the statement of financial position at cost plus post acquisition changes in the consolidated entity’s
share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount
of the investment and is neither amortised nor individually tested for impairment. Dividends received or
receivable from associates reduce the carrying amount of the investment.
When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables, the consolidated entity does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence
over the associate and recognises any retained investment at its fair value. Any difference between
the associate’s carrying amount, fair value of the retained investment and proceeds from disposal is
recognised in profit or loss.
(u) New or amended Accounting standards and interpretations adopted
Other than the policies related to lease liabilities as noted above there have been no changes in accounting
policies during the year ended 30 June 2020.
(v) Accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet effective and have not been adopted by the Group for the annual reporting period ended 30 June
2020 are outlined in the table below.
STANDARD
MANDATORY DATE FOR
ANNUAL REPORTING PERIODS
BEGINNING ON OR AFTER)
REPORTING PERIOD
STANDARD ADOPTED BY
THE COMPANY
The revised Conceptual Framework for
Financial Reporting
1 January 2020
1 July 2020
AASB 2018-6 Amendments to Australian
Accounting Standards – Definition of
a Business
AASB 2018-7 Amendments to Australian
Accounting Standards – Definition
of Material
AASB 2020-1 Amendments to Australian
Accounting Standards – Classification of
liabilities as Current or Non-Current
1 January 2020
1 July 2020
1 January 2020
1 July 2020
1 January 2023
1 July 2023
At this time, the application of these Australian Accounting Standards and Interpretations is not expected
to have a material impact on the Group’s financial statements.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
41
(w) Critical accounting estimates and judgments
The preparation of the consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts in the consolidated financial statements.
Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses. Management bases its judgments and estimates on historical experience
and on other various factors it believes to be reasonable under the circumstances, the result of which form
the basis of the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions and conditions.
Management has identified the following critical accounting policies for which significant judgments,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the financial position reported in
future periods.
Further details of the nature of these assumptions and conditions may be found in the relevant notes to
the consolidated financial statements.
Recoverability of receivables
The Group continues to provide against the likelihood of ultimate collectability of trade receivables and
other related party receivables where appropriate. The consolidated financial statements do not include
any adjustments relating to the recoverability and classification of recorded asset amounts that might be
necessary should the Group’s judgments differ from future circumstances.
Tax losses recognised
Deferred tax assets relating to unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
As at 30 June 2020 it has been determined that loses of $2,472,372 at a tax rate of 27.5% will not be
brought to account as it is not probable that they will be recovered in the next 12 months.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the consolidated entity
and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable
amount of the asset is determined. During the year ended 30 June 2020 no such indicators was relevant to
the Group.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has
had, or may have, on the Group based on known information. This consideration extends to the nature
of the products and services offered, customers, supply chain, staffing and geographic regions in which
the Group operates. Other than as addressed in specific notes, there does not currently appear to be
either any significant impact upon the financial statements or any significant uncertainties with respect to
events or conditions which may impact the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19) pandemic.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance
with the accounting policy stated in note 1. The recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These calculations require the use of assumptions,
including estimated discount rates based on the current cost of capital and growth rates of the estimated
future cash flows.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
42
(W)
Critical accounting estimates and judgment continued
Estimated fair value of share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at
the fair value of the equity instruments at the grant date.
For the long-term incentive plans the fair value of the rights at grant date is determined using on options
pricing model and is expensed on a straight-line basis over the vesting period, based on the Group’s
estimate of the number of equity instruments that will eventually vest.
At the end of each reporting period, the Group revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss,
where the change is unrelated to market conditions, such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to the employee share plans reserve
THE GO2 PEOPLE LTDFor personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
43
NOTE 2
FINANCIAL RISK MANAGEMENT OBJECTIVES
AND POLICIES
The Group’s principal financial instruments comprise receivables, payables, borrowings and cash and
cash equivalents.
Risk Exposures and Responses
The Group manages its exposure to key financial risks in accordance with the Group’s financial risk
management policy. The objective of the policy is to support the delivery of the Group’s financial targets
whilst protecting future financial security.
(i) Interest rate risk
The Group’s exposure to interest rate risk, which is the risk that the borrowings will fluctuate as a result of
changes in the market interest rates. Where possible borrowings used for fixed asset purchases will be at
a fixed interest rate providing certainty on future interest payments. The Group’s Trade Debtor financing
facility has an interest rate payable referenced to the Bank Bill Rate. The Group manages its interest
exposure with respect to weekly drawdowns vs prevailing interest rates and the Groups’ working capital
position. The represents a significant cash-flow risk.
SENSITIVITY OF INTEREST RATE RISK
FY2020 Effect on profit
FY2019 Effect on profit
(ii) Credit risk
50 BPS DECREASE ($)
50 BPS INCREASE ($)
15,963
343,465
(15,963)
(343,465)
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and,
trade and other receivables. The Group’s exposure to credit risk arises from potential default of the
counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at
reporting date is addressed in each applicable note.
The Group manages credit risk by trading only with recognised, credit-worthy third parties, along with a
credit insurance policy to cover for potential insolvency of clients. Collateral is not requested nor is it the
Group’s policy to secure its trade and other receivables.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit
verification procedures. Risk limits are set for each customer and are regularly monitored. In addition,
receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad
debts is spread. There are no significant concentrations of credit risk within the Group.
(iii) Liquidity risk
Liquidity risk requires the Group to maintain sufficient liquid assets to be able to pay debts as and
when they fall due. The Group manages the liquidity risk by having a facility to finance its trade debtors
effectively accelerating payment terms. A significant amount of costs is variable linked directly to revenue
sources, if revenue falls then the operating costs also fall. The Group has strong internal systems around
approval of clients, cost incurrence and cashflow management. The Group is exposed to liquidity risk via
trade, other receivables and financing lease liabilities.
Remaining contractual maturities
When assessing the contractual maturity of the financial liabilities the entire liability balance has a
matruity of < 12 months except for non-current lease liabilities of $89,096. In the prior year the
balance not < 12 months was 288,427.
THE GO2 PEOPLE LTDFor personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
44
NOTE 3
SEGMENT INFORMATION
(a) Identification of reportable segments
As noted within this annual report the Group has reassessed its business operations during the year and
how the business is viewed by the Directors being the Chief Operating Decision Makers of the Group. In
the prior period the Group operated under the following four segments;
• Labour Hire and Recruitment Services
• Residential and Remote Building Services
• Skills and Training Services
• Corporate cost centre
During the year it was determined the Group would no longer focus on the activities performed by the
building division. In addition, the Skills and Training business contributed approximately $0.6 million (2%)
of Group revenue which is insignificant to the Group
The Directors and management have therefore determined that the Group operates in a single operating
segment being the provision of labour hire, recruitment and training services in Australia.
(b) Segment results
Segment results represent earnings before depreciation, interest, tax and other significant items and prior
to any corporate costs.
Segment revenues and expenses are those that are directly attributable to a segment and the relevant
portion that can be allocated to the segment on a reasonable basis. There is no significant concentration
of revenue per customer.
Segment revenues, expenses and results exclude transfers between segments. The revenue from external
parties is reported to the chief operating decision maker and is measured in a manner consistent with that
in the statement of profit or loss and other comprehensive income.
(c) Segment location
The Group only operates in one geographic segment being Australia
(d) Major customers
During the year ended 30 June 2020, 2 large mining services and construction companies accounted for
14.97% and 14.91% respectively of the Group’s external recruitment revenue, as compared to 12.1% being
derived from sales to a major Australian waste management company for the 30 June 2019 year.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
45
NOTE 4
REVENUE
REVENUE
Labour hire services
Building services
Training services
2020 ($)
2019 ($)
27,128,636
43,113,590
1,258,285
2,385,284
607,927
614,806
Other labour hire revenue
88,573
335,853
TOTAL REVENUE
29,083,421
46,449,533
Services provided at a point in time
27,825,136
44,063,979
Services transferred over time
1,258,285
2,385,284
29,083,421
46,449,263
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
46
NOTE 5
EXPENSES
PROFIT BEFORE INCOME TAX INCLUDES THE FOLLOWING
SPECIFIC EXPENSES:
2020 ($)
2019 ($)
COST OF SALES
COST OF SALES
DEPRECIATION
25,428,974
41,349,925
Plant & Minor Equipment
177,744
56,967
Motor Vehicles
49,698
234,887
Office Equipment incl Computers
74,053
62,524
TOTAL DEPRECIATION
301,495
354,378
AMORTISATION
Property lease
Motor vehicles lease
Amortisation of building intangible assets
TOTAL AMORTISATION
237,955
109,065
100,771
447,791
-
-
-
-
TOTAL DEPRECIATION AND AMORTISATION
749,286
354,378
IMPAIRMENT
TRADE RECEIVABLES
FINANCE COSTS
506,245
(2,125)
Interest and finance charges paid payable
331,816
581,377
Bank fees paid
10,260
18,704
FINANCE COSTS EXPENSED
342,076
600,081
SUPERANNUATION EXPENSE
236,076
379,000
SHARE-BASED PAYMENTS EXPENSE
80,719
27,599
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
47
NOTE 6
OTHER INCOME
REVENUE
2020 ($)
2019 ($)
Net gain on disposal of property, plant and equipment
57,196
81,440
Government incentives
Settlement of Legal Claim
272,667
350,000
-
-
TOTAL OTHER INCOME
679,863
81,440
The settlement of the legal claim relates to the Building debtor that was placed into administration and
deficiencies in the services provided by the group’s previous legal advisor, which left the company in an
unsecured position when it expected to have security in the administration process.
NOTE 7
INCOME TAX EXPENSE
Deferred tax assets relating to unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
As at 30 June 2020 it has been determined that tax losses of $2,472,372 tax effected at 27.5% will not be
brought to account as it is not probable that they will be recovered in the short term.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
48
NOTE 8
CASH AND CASH EQUIVALENTS
For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following:
Cash at bank and on hand
1,274,113
938,804
2020 ($)
2019 ($)
RECONCILIATION OF NET PROFIT AFTER TAX TO
NET CASH FLOWS FROM OPERATIONS
Loss for the period
Share option costs
1,274,113
938,804
(1,850,689)
(3,588,144)
80,719
27,599
Depreciation amortisation and impairment expenses
749,285
444,938
Net impairment of receivables
156,245
-
Recovery/(Impairment) of related party loans
-
491,295
Share of equity accounted investment results
36,307
19,597
CHANGE IN OPERATING ASSETS AND LIABILITIES
Decrease/(Increase) in trade and other receivables
4,512,698
3,461,349
Decrease/(Increase) in other assets
83,969
(99,977)
Increase in provisions
33,393
42,608
Increase / (Decrease) in trade and other payables
(787,062)
(680,090)
(Decrease) / Increase in current tax liabilities
-
492,229
NET CASH GENERATED BY / (USED IN) OPERATING ACTIVITIES
3,014,865
611,404
RECONCILIATION
OF LIABILITIES
ARISING FROM
FINANCING
ACTIVITIES
Insurance Premium
funding facility
NOTE
BALANCE AT 1
JULY 2019
FINANCING
CASHFLOWS
NON-CASH
CHARGES
NEW
FINANCE
LEASES
BALANCE AS
AT 30 JUNE
2020
17
129,602
(1,031,794)
1,027,866
125,674
129,602
(1,031,784)
1,027,866
125,674
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
49
NOTE 9
TRADE AND OTHER RECEIVABLES
Trade receivables
2020 ($)
2019 ($)
4,252,892
8,765,994
Work in progress and accrued revenue
324,775
330,050
Less provision for expected credit losses
(135,588)
(394,164)
Other receivables
TOTAL RECEIVABLES
4,442,079
8,701,880
42,052
325,221
4,484,131
9,027,101
Trade receivables are non-interest-bearing trading terms vary from 7 days from invoice to 45 days from
the end of month of invoice date. A majority of the clients are on 30 – 45 days end of month terms.
As at 30 June 2020 the ageing analysis of trade receivables is as follows:
TOTAL ($)
0-30 DAYS ($) 31-60 DAYS ($) 61-90 DAYS ($) + 91 DAYS ($)
30 June 2020
4,252,892
2,407,268
1,151,487
263,878
430,258
Expected credit
loss 2020
(135,588)
-
-
-
(135,588)
30 June 2019
8,765,994
4,450,793
1,974,761
569,373
1,469,903
Expected credit
loss 2019
(328,164)
-
-
-
(135,588)
NOTE 10
OTHER ASSETS
Prepayments
Inventory
Other receivables
2020 ($)
2019 ($)
391,655
396,037
-
-
230,384
6,046
391,655
632,467
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
50
NOTE 11
ASSETS HELD FOR SALE
Building division assets – held for sale
30 JUNE 2020 ($)
30 JUNE 2019 ($)
79,136
79,136
-
-
The Group’s descaled Building Division has a number of assets on market for sale which are expected to be
realised within the next 6 months and as such are classified as a current asset held for sale.
NOTE 12
PLANT AND EQUIPMENT
Year ended 30 June 2020
Plant &
Equipment
($)
Motor
Vehicles
($)
Office
Equipment
($)
Computers
& Software
($)
Minor
Equipment
($)
Total
($)
AT 30 JUNE 2020
Cost
169,274
188,255
341,169
118,699
21,102
838,499
Accumulated
depreciation
NET CARRYING
AMOUNT
(169,274)
(159,297)
(278,811)
(117,729)
(17,782)
(742,893)
-
28,958
62,358
970
3,320
95,606
MOVEMENTS IN CARRYING AMOUNT OF PLANT AND EQUIPMENT
AT 1 JULY
2019 NET OF
ACCUMULATED
DEPRECIATION
199,170
665,845
109,525
7,556
8,260
990,356
Additions
-
-
15,359
Disposals
(99,549)
-
-
-
-
-
15,359
(99,549)
Depreciation
(99,621)
(49,698)
(62,526)
(6,586)
(4,940)
(223,371)
Reclassification to
Right of use Asset
AT 30 JUNE
2020 NET OF
ACCUMULATED
DEPRECIATION
-
(587,189)
-
-
-
(587,189)
-
28,958
62,358
970
3,320
95,606
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
51
NOTE 12 PLANT AND EQUIPMENT CONTINUED
Year ended 30 June 2019
Plant &
Equipment
($)
Motor
Vehicles
($)
Office
Equipment
($)
Computers
& Software
($)
Minor
Equipment
($)
Total
($)
AT 30 JUNE 2019
Cost
323,454
1,132,183
325,809
118,699
21,108
1,921,247
Accumulated
depreciation
NET CARRYING
AMOUNT
(124,284)
(466,338)
(216,284)
(111,143)
(12,842)
(930,891)
199,170
665,845
109,525
7,556
8,260
990,356
MOVEMENTS IN CARRYING AMOUNT OF PLANT AND EQUIPMENT
AT 1 JULY
2018 NET OF
ACCUMULATED
DEPRECIATION
214,418
507,245
57,131
22,049
6,247
637,777
Additions
37,478
475,143
82,794
1,273
4,456
770,034
Assets acquired on
acquisition
-
-
24,728
Disposals
(284)
(98,373)
(600)
-
-
-
24,728
(1,789)
(101,046)
Depreciation
(52,442)
(234,887)
(59,495)
(3,029)
(4,525)
(354,378)
AT 30 JUNE
2019 NET OF
ACCUMULATED
DEPRECIATION
199,170
665,845
109,525
7,556
8,260
990,356
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
52
NOTE 13
INTANGIBLE ASSETS
Intellectual property
2020 ($)
2019 ($)
70,500
70,500
Less: Accumulated impairment
(70,500)
-
Goodwill
-
70,500
481,519
481,519
Less: Accumulated impairment
-
-
481,519
481,519
The goodwill is attributable to the acquisition of the GO2 Skills and Training business. Intellectual property
impaired during the period relates to the Group’s building division. Based on the change to the Group’s
strategy as discussed elsewhere in this report this amount has been impaired in full.
Impairment tests for goodwill
For impairment testing purposes, the Group identifies its cash generating units (CGUs) as the smallest
identifiable group of assets that generate cash inflows largely independent of the cash inflows of other
assets or groups of assets. The Group has identified two CGUs being;
• The recruitment and labour hire CGU; and
• The skills and training CGU.
Indefinite life intangible assets held by each CGU are as follows:
Recruitment and labour hire CGU
-
-
Skills and Training CGU
481,519
481,519
2019 ($)
2018 ($)
Indefinite life intangible assets in the Skills and Training CGU relates to goodwill created on the acquisition
of the GO2 Skills and Training business, which was completed during the year ended 30 June 2019.
The Group completes an annual impairment test in accordance with AASB 136 for each CGU with indefinite
life intangible assets or when an impairment trigger exists. Where the carrying amount of assets contained
within the CGU exceeds its recoverable amount the assets contained within the CGU are considered
impaired and written down to their recoverable amount. The Group considers its relationship between
its market capitalisation and book value of equity, among other factors, when reviewing for indicators of
impairment.
Based on the above, an impairment test was performed for the Skills and Training CGU during the year.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
53
NOTE 13 INTANGIBLE ASSETS CONTINUED
Impairment assessment for Skills and Training CGU.
The recoverable amount of the CGU is determined based on value in use. Value in use is calculated using
a discounted cash flow model covering a five-year period with an appropriate terminal growth rate at the
end of that period for each CGU. The model is based upon an estimated future five-year cash flow forecast,
incorporating a base year 1 budget year, a four-year forecast period, and a terminal value calculation in the
fifth year, with the following key input assumptions:
KEY ASSUMPTIONS
30 JUNE 2020
Growth rate over forecast period
Terminal value growth rate
Pre-tax discount rate
5.0%
2.0%
15.0%
As at 30 June 2020, management has assessed the carrying value of assets and performed an impairment
test on the Skills and Training CGU.
No comparative information has been disclosed as this the first year in which an impairment test has been
performed following the completion of the acquisition in the year ended 30 June 2019.
The key estimates and assumptions used to determine the recoverable amount of a CGU are based on
management’s current expectations after considering past experience and external information and are
considered to be reasonably achievable.
The Directors and management have considered and assessed reasonably possible changes for key
assumptions in relation to the CGU and have not identified any reasonable instances that could cause the
carrying amount to exceed its recoverable amount.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
54
NOTE 13
RIGHT-OF-USE ASSETS
Year ended 30 June 2020
LAND AND
PROPERTIES ($)
MOTOR
EHICLES ($)
TOTAL ($)
AT 30 JUNE 2020
Cost
413,225
589,047
1,002,272
Accumulated amortisation
(237,955)
(290,670)
(528,625)
NET CARRYING AMOUNT
175,270
298,377
473,647
MOVEMENTS IN CARRYING AMOUNT OF RIGHT OF USE ASSETS
AT 1 JULY 2019 NET OF
AMORTISATION
Reclassification to Right of use
Asset
Additions
Disposals
351,091
-
-
587,189
351,091
587,189
62,134
-
62,134
-
(179,747)
(179,747)
amortisation
(237,955)
(109,065)
(347,020)
AT 30 JUNE 2020 NET OF
ACCUMULATED AMORTISATION
175,270
298,377
473,647
Right of use assets – land and buildings consist of the Group’s rental leases for properties in Western
Australia (remaining term 12 months, option to extend not included in the valuation), New South Wales
(remaining term 5 months, no option to extend included in the valuation) and Queensland (remaining term
16 months, no option to extend included in the valuation). For calculation of the value the Group has used
a discount based on the weighted average incremental borrowing rate of 5.25%
Right of use asset - plant and equipment consists of vehicles previously disclosed as plant and equipment.
For comparative purposes, at 30 June 2019 this balance was $565,757.
The Group leases office equipment under specific agreements. These leases are either short-term or low-
value, so have been expensed as incurred and not capitalised as right-of-use assets.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
55
NOTE 15
TRADE AND OTHER PAYABLES
Trade payables and accruals
555,692
674,923
2020 ($)
2019 ($)
Payroll liabilities
Other payables
1,430,039
1,873,382
1,908,250
2,581,796
3,893,981
5,130,101
Trade payables are non-interest bearing and are normally settled on 30-day terms. Other payables predominantly relate to
obligations with the Australian Tax Office for GST, which is not considered overdue
NOTE 16
LEASE LIABILITIES
Finance Lease liabilities (i)
-
551,620
30 JUNE 2020 ($)
30 JUNE 2019 ($)
Lease Liabilities (i)(ii)
TOTAL LEASE LIABILITIES
Current
Non-current
434,898
434,898
345,801
89,096
-
551,620
263,193
288,427
434,897
551,620
Summary of borrowing arrangements:
(i) Secured by a charge on the Group’s motor vehicles. Interest rates varying between 5.75% and 4.65%
per annum is charged on the outstanding loan balance. Repayable over 5 years. Including in Borrowings
in FY2019
(ii) Relates to the Group’s rental leases for properties in in Western Australia (remaining term 12 months,
option to extend not included in the valuation), New South Wales (remaining term 5 months, no option
to extend included in the valuation) and Queensland (remaining term 16 months, no option to extend
included in the valuation). For calculation of the lease liability the Group has used a discount based on
the weighted average incremental borrowing rate of 5.25%. $16,818 in interest on lease liabilities has been
recognised through the profit or loss.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
56
NOTE 17
BORROWINGS
SECURED – AT AMORTISED COST
30 JUNE 2020 ($)
30 JUNE 2019 ($)
Insurance premium funding (i)
121,782
125,722
Bank debt factoring (ii)
3,000,249
5,016,777
Other
16,374
34,419
TOTAL BORROWINGS
3,318,405
5,176,918
Current
Non-current
3,318,405
5,176,918
-
-
3,318,405
5,176,918
Summary of borrowing arrangements
(i) Relates to the Group’s insurance premium funding facility, an interest rate of 3.2% per annum is charged
on the initial facility balance. Repayable over 10 months.
(ii) Collateral over the Group’s trade receivables. Effective interest of 6.42% per annum. Repayable on
collection of the receivables funded and drawn again to fund new receivables. The facility limit amounted
to $15,000,000 and unused facility as at reporting date was $11,999,751.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
57
NOTE 18
ISSUED CAPITAL
a) Ordinary Shares in GO2 People Ltd
BALANCE AT 1 JULY 2018
117,964,583
0.140
16,543,514
NUMBER OF
SHARES ($)
SHARE PRICE ($)
($)
Less Share Issue Costs
BALANCE AT 30 JUNE 2019
117,964,583
TRANSACTIONS TO 30 JUNE 2020
(685,226)
15,858,288
Rights issue Dec 19
18,050,985
0.016
288,815
Less Share Issue Costs
(65,671)
Shortfall issue Feb 20
6,500,000
0.016
104,000
Less Share Issue Costs
Options exercised
174,050
0.04
Less Share Issue Costs
(25,828)
6,962
(1,922)
BALANCE AT 30 JUNE 2020
142,689,618
16,164,644
Issued capital reflects the issued capital of GO2 People Ltd.
Each respective ordinary share entitles the holder to participate in dividends, and to share in the proceeds
of winding up the respective legal entity in proportion to the number of and amounts paid on the shares
held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
b) Options and rights issue
On 29 November 2019 the Company invited its shareholders to subscribe to a rights issue of 117,964,583
ordinary shares at an issue price of $0.016 per share on the basis of 1 share for every 1 ordinary share held,
with such shares to be issued on 24 December 2019.
The offer included 1 free attaching option for every 2 shares issued exercisable at $0.04 per new option on
or before 29 January 2021.
The Company received acceptances for 18,050,985 shares and 9,025,497 attached options. The Company
also placed a further 6,500,000 shares (3,250,000 attaching options) as shortfall.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
58
NOTE 18 ISSUED CAPITAL CONTINUED
Movement in Options
OPENING
BALANCE AT 1
JULY 2019
GRANTED
DURING
PERIOD
FORFEITED
DURING
PERIOD
EXERCISED
DURING
PERIOD
OUTSTANDING
AT 30 JUNE
2020
EXERCISABLE
AT 30 JUNE
2020
WEIGHTED
EXERCISE
PRICE
Class A
2,500,000
Class B
6,750,000
Class C
7,500,000
-
-
-
Class D
-
12,275,497
TOTAL
16,750,000
12,275,497
c) Loss per share
-
-
-
-
-
-
-
-
2,500,000
2,500,000
$0.225
6,750,000
6,750,000
$0.30
7,500,000
7,500,000
$0.40
174,050
12,101,447
12,101,447
$0.04
174,050
28,851,447
28,851,447
$0.21
2020 ($)
2019 ($)
Loss used to calculate basic and diluted EPS
(1,850,689)
(3,588,144)
Weighted average number of ordinary shares used in
calculating basic and diluted EPS
No.
No.
129,622,482
117,694,583
The effect of potential ordinary shares from exercise of any of the options issued by the Company have not
been included in the calculation of the diluted loss per share as their effect is anti-dilutive. These options
could potentially dilute basic earnings per share in the future.
NOTE 19
RESERVES
a) Share Based Payments Reserve
This reserve records items recognised as expenses on the issue and valuation of shares, options or other
rights as issued. The costs associated with the issue of options during the period
was $80,719 (2019: $27,599).
b) Performance rights
On 26 November 2019 the Company issued 5,000,000 performance rights to a number of key employees
which vest on 1 July 2020, subject to holding employment with the Company up to and until 1 July 2020.
The performance rights expire on 31 December 2020. The valuation of the Rights was based on the Black
Scholes Model using a spot price at issue of $0.015, a risk-free rate of 0.92% p.a., market volatility of 75% and
a dividend yield of 0%. Due to the short vesting period it is assumed 100% of the Rights will be exercised.
c) Value of Payments through the Share Based Payments Reserve
All share-based payments are valued using the Black Scholes Method the time of payment or issue of
options/rights. Variables in the model being spot price, risk free rate, volatility and dividend yield are all
calculated with reference to relevant markets at the date of issue.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
59
NOTE 20
RELATED PARTY DISCLOSURES
All transactions which occurred between companies within The GO2 People Ltd have been eliminated in
the preparation of the consolidated financial statements.
2020 ($) 2019 (PRE-ACQUISITION) ($)
TRANSACTIONS WITH DIRECTOR RELATED ENTITIES
GO2 Skills & Training
Payment for skills and leadership training
Recovery of insurance premiums, office and facility costs
Consultancy fees
-
-
20,850
20,850
LOANS TO ASSOCIATED PARTIES
GO2 People Ltd
Loan to Giraffe Australia Pty Ltd (trading as Core FM)
48,546
48,546
(19,635)
56,051
-
36,416
-
-
THE CONSOLIDATED FINANCIAL STATEMENTS INCLUDE
GO2 People Ltd
GO 2 Building Pty Ltd
COUNTRY OF
INCORPORATION*
Australia
Australia
Terra Firma Constructions Pty Ltd
Australia
The GO2 Recruitment Unit Trust*
Australia
GO2 Recruitment Pty Ltd
Australia
The GO2 People Australia Pty Ltd
Australia
GO2 Skills & Training Pty Ltd
Australia
OWNERSHIP INTEREST
2020
100%
100%
100%
100%
100%
100%
100%
2019
100%
100%
100%
100%
100%
100%
100%
* GO2 Recruitment Unit Trust was settled in Australia, it is not an incorporated entity.
THE GO2 PEOPLE LTDFor personal use only NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60
NOTE 20 RELATED PARTY DISCLOSURES CONTINUED
Key Management Personnel
The Directors and other key management personnel of the Group during or since the end of the financial
period were:
Current Directors
• Abilio Ferreira – remunerated through employment contract and director fees
• Darren Cooper – remunerated through director agreement only
• Paul Goldfinch– remunerated through director agreement and consulting agreement
Previous Directors
• Andries Dique – remunerated through director agreement only up until resignation on 28 November 2019.
Key Management
• Matthew Thomson (CFO and Joint Company Secretary) – remunerated through employment contract
• Peter Torre (Joint Company Secretary) – remunerated through consulting contract
• Ross Lovell (EGM Recruitment) – remunerated through employment contract
Previous Key Management
• Chris Streat (Head of Building) - remunerated through employment contract up until resignation on
16 December 2019.
• The receivable due from Chris Streat relating to the Building project was repaid during the year
Short term employee benefits
1,128,962
1,423,098
2020 ($)
2019 ($)
Superannuation benefits
Share based payments
Performance rights
99,884
119,300
-
27,599
30,000
-
1,258,846
1,569,997
THE GO2 PEOPLE LTDFor personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
61
NOTE 21
AUDITOR’S REMUNERATION
AMOUNT RECEIVED OR DUE AND RECEIVABLE BY FOR:
An audit and review of the financial statements of the Group
51,250
50,150
30 JUNE 2020 ($)
30 JUNE 2019 ($)
Other services
Due Diligence Report related to a business acquisition
-
51,250
20,717
70,867
NOTE 22
PARENT ENTITY FINANCIAL INFORMATION
The individual financial statements for the parent entity being the GO2 People Ltd, which was incorporated
on 30 November 2016, show the following aggregate amounts:
30 JUNE 2020 ($)
30 JUNE 2019 ($)
ASSETS
Cash and cash equivalents
Other assets
Investments
Loans receivable
TOTAL ASSETS
LIABILITIES
Trade and other payables
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
1,034,623
107,987
917,750
106,232
6,991,423
6,991,423
6,011,806
6,469,431
14,145,839
14,484,836
51,288
51,288
268,177
268,177
14,094,551
14,216,659
16,164,644
15,840,782
1,689,019
1,598,225
Retained earnings / (accumulated losses)
(3,759,112)
(3,222,348)
TOTAL EQUITY
14,094,551
14,216,659
LOSS OF THE PARENT ENTITY
TOTAL COMPREHENSIVE LOSS OF THE PARENT ENTITY
536,764
536,764
528,932
528,932
Related Party Transactions - Refer to Note 20 for disclosure of transactions between the parent entity
and
related parties.
THE GO2 PEOPLE LTDFor personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62
NOTE 23
CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
Contingent liabilities
Term deposits included in other financial assets to the value of $156,843 (2019: $156,878) secure bank
guarantees provided to support Lease agreements for the Group’s operations in Western Australia,
Queensland and New South Wales.
The GO2 People Ltd does not have any other contingent liabilities at 30 June 2020.
Contractual Capital Commitments
With the exception of matters disclosed in Note 16, and other than leases of office equipment that are
either short-term or low-value, The GO2 People Ltd does not have any contracted capital commitments at
30 June 2020.
THE GO2 PEOPLE LTDFor personal use only THE GO2 PEOPLE LTD
DIRECTORS’ DECLARATION
6363
07
THE GO2 PEOPLE LTDFor personal use only 64
DIRECTORS’
DECLARATION
In accordance with a resolution of the Directors, I state that:
1. In the opinion of the Directors:
(a) The financial statements and notes of the GO2 People Ltd for the financial period ended 30 June
2020 are in accordance with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards and the Corporations Regulations 2001;
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2020 and its
performance for the period then ended;
(b) The financial statements and notes also comply with International Financial Reporting Standards
as disclosed in Note 1; and
(c) There are reasonable grounds to believe that the Group will be able to pay its debts as and when
they fall due.
2. This declaration has been made after receiving the declarations required to be made to the directors by
the Group Managing Director and the Group Chief Financial Officer in accordance with section 295A of the
Corporations Act 2001 (Cth) for the financial year ended 30 June 2020.
Darren Cooper
Company Chair – The GO2 People Ltd
28 August 2020
THE GO2 PEOPLE LTDFor personal use only
THE GO2 PEOPLE LTD
AUDITOR’S REPORT
6565
08
THE GO2 PEOPLE LTDFor personal use only 66
The GO2 People Ltd
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of The GO2 People Ltd (the Company) and its
controlled entities (the Group), which comprises the consolidated statement of financial
position as at 30 June 2020, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 of the financial statements which indicates that the Group
incurred a net loss before income tax of $1,850,689 and is in a net working capital
deficiency of $1,252,207. These conditions, along with other matters as set forth in Note 1,
indicate the existence of a material uncertainty which may cast significant doubt about the
For personal use only
67
Group’s ability to continue as a going concern and therefore, the Group may be unable to realise its assets
and extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined the matters described below to be the key audit matters to be
communicated in our report.
RECOGNITION OF REVENUE UNDER SERVICE CONTRACTS
How our audit addressed it
Our audit procedures included assessing
management’s application of the requirements of
AASB 15 Revenue from Contracts with Customers
on the revenue recognition of the group:
— Examining and recalibrating management’s
revenue recognition model;
— Testing of customer invoicing under the
contract; and
— Tracing through to new service contracts to
understand material terms and conditions,
including identification of performance
obligations, any particular seller warranties or
indemnities given and their potential impact
upon the revenue recognition model.
We also assessed the adequacy of the Group’s
disclosures in the financial report.
Area of focus
Refer to Notes 1 and 4
The Group has service contracts with major
customers in its residential and remote building
services segment.
These service contracts have invoicing and
payment milestones included within their terms,
which may or may not be directly aligned with the
performance obligations under the contract.
In order to accrue revenue appropriately in the
correct accounting period, management have
developed a model which identifies the period in
which revenue is accrued, adjusted for invoicing
milestones.
There is potential for subjectivity in determining
which period to which the revenue should be
attributed. In designing the model management
considers:
— The time period over which the service
revenue is generated, and the performance
obligations are satisfied;
— Indicators of levels of effort in generating that
revenue, being that the accretion of costs to
service that revenue or surveys of work
performed; and
— The potential for any post-contract servicing
work to be performed at the conclusion of the
contract.
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68
RECOVERY OF TRADE RECEIVABLES
Area of focus
Refer to Notes 1 and 9
In prior periods the Group has incurred significant
losses relating to bad debts and in the current
period the Group has an expected credit loss in
relation to trade receivables of approximately
$0.14 million.
At each reporting date, management reviews the
profile of their book of receivables to consider and
recognise the expected credit loss. The amount of
expected credit losses is updated at each reporting
date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The entity makes use of a simplified approach in
accounting for trade receivables and records the
loss allowance at the amount equal to the
expected lifetime credit losses. The entity uses its
historical experience, external indicators and
forward-looking information to calculate the
expected credit losses.
How our audit addressed it
To ensure receivables that were recorded as at
financial reporting date were recoverable, our audit
procedures included the following:
— Examining the control environment for
managing credit positions with existing and
new customers;
— At year-end, confirming directly and vouching
to contract significant trade receivable
balances with customers;
— Vouching receipts from those aforesaid
customers post reporting date;
— Examining the ageing profile of customers as
at reporting date for receivable positions
beyond contractually agreed terms; and
— Corroborating the above audit evidence with
management’s calculation of the expected
credit loss.
We also assessed the adequacy of the Group’s
disclosures in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2020 but does not include the financial
report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
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69
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to fraud
or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of The GO2 People Ltd, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
A. A. Finnis
Director
Melbourne, 28 August 2020
For personal use only
THE GO2 PEOPLE LTD
SHAREHOLDER INFORMATION
70
09
THE GO2 PEOPLE LTDFor personal use only SHAREHOLDER INFORMATION
71
SHAREHOLDER
INFORMATION
Additional information required by the Australian Securities Exchange Ltd Listing Rules and not disclosed
elsewhere in this report. This information is current as of 27th August 2020.
Top Holders
THE GO2 PEOPLE LTD
ORDINARY FULLY PAID (TOTAL)
TOP HOLDERS (GROUPED) AS OF 8/26/2020
COMPOSITION : ORD,E24,ES1
RANK NAME
UNITS % UNITS
EVERGLADES INVESTMENT PTY LTD
27,500,000
GOLDFINCH DISCRETIONARY PTY LTD
27,500,000
1
1
3
4
5
6
7
8
8
MR GREGORY PHILIP GOLDFINCH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR SAMUEL JAMES POMANA
NAVIGATOR CONSULTING & RESEARCH PTY LTD
MR JOHN THOMAS HARRIS
MR PETER JOHN BELLGROVE
PAGONDAS PTY LTD
10
MR MICHAEL WILLIAM GAULE
11
12
13
13
15
16
17
18
19
20
20
20
20
20
20
MR CHRISTOPHER STREAT
CITICORP NOMINEES PTY LIMITED
ALIITAEAO ASIATA
GUNZ PTY LTD
LUIK HOLDINGS PTY LTD
MR TIMOTHY JOHN KEMP-BISHOP + MRS ARRIARNE KEMP-BISHOP
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
MR WILLIAM COOKE
MR CAMERON JOHN ROSS
COOPER RETIREMENT PTY LTD
EVCORP AUSTRALIA PTY LTD
DANIEL FORD + MARLENA FORD
GUNNIBLE RIDGE INVESTMENTS PTY LTD
R & M O THOMAS PTY LTD
MR PAUL XIRADIS + MRS EVE XIRADIS
19.27
19.27
4.40
4.07
2.00
1.84
1.67
1.40
1.40
1.25
1.06
0.97
0.88
0.88
0.84
0.78
0.77
0.76
0.74
0.70
0.70
0.70
0.70
0.70
0.70
6,278,579
5,814,046
2,859,500
2,631,107
2,377,420
2,000,000
2,000,000
1,784,805
1,510,000
1,383,226
1,250,000
1,250,000
1,200,000
1,111,110
1,105,000
1,083,809
1,060,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Totals: Top 25 holders of ORDINARY FULLY PAID (Total)
97,698,602 68.47%
Total Remaining Holders Balance
44,991,016 31.53%
THE GO2 PEOPLE LTDFor personal use only SHAREHOLDER INFORMATION
72
Distribution of Equity Security Holders
RANGE
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Rounding
Total
TOTAL HOLDERS
UNITS
% UNITS
8
17
82
185
144
436
1,715
60,135
780,871
8,924,487
132,922,410
0.00
0.04
0.55
6.25
93.15
0.01
142,689,618
100.00
Marketable Parcels
Number of shareholders holding less than a marketable parcel of ordinary shares is 95.
Unlisted Options
Number of shareholders holding less than a marketable parcel of ordinary shares is 95.
THE GO2 PEOPLE LIMITED
[CUSTOM SELECTION]
ISSUED CAPITAL AS OF 26/08/2020
COMPOSITION : OP2,OP1,OP5,PER,O12,EOP
REGISTER
SUB-REGISTER
CURRENT HOLDERS NIL HOLDERS
UNITS
UNL OPTS EXP 17/12/21 @ $0.30 (OP2)
WESTERN
AUSTRALIA
Issuer
WESTERN
AUSTRALIA Total
UNL OPTS EXP 21/06/21 @ $0.40 (OP1)
WESTERN
AUSTRALIA
Issuer
WESTERN
AUSTRALIA Total
UNL OPTS EXP 21/06/21 @$0.225 (EOP)
WESTERN
AUSTRALIA
Issuer
WESTERN
AUSTRALIA Total
UNL OPTS EXP 21/06/21 @$0.30 (O12)
WESTERN
AUSTRALIA
Issuer
WESTERN
AUSTRALIA Total
UNL OPTS EXP 29/01/21 @ $0.04 (OP5)
WESTERN
AUSTRALIA
Issuer
WESTERN
AUSTRALIA Total
3
3
5
5
1
1
6
6
38
38
0
0
0
0
5
5
0
0
2
2
1,750,000
1,750,000
7,500,000
7,500,000
2,500,000
2,500,000
5,000,000
5,000,000
12,101,447
12,101,447
CLASS TOTALS
50
2
28,851,447
THE GO2 PEOPLE LTDFor personal use only
SHAREHOLDER INFORMATION
73
Voting Rights
Every ordinary shareholder present in person or by proxy at meetings of shareholders shall have one vote for
every share held. Option holders have the right to attend meetings but have no voting rights until the options
are exercised.
Substantial Shareholders
The following shareholders are considered substantial shareholders.
1 EVERGLADES INVESTMENT PTY LTD
27,500,000
1 GOLDFINCH DISCRETIONARY PTY LTD
27,500,000
23.31
23.31
Share Buy Backs
There is no current on market share buy-back.
THE GO2 PEOPLE LTDFor personal use only Queensland - Brisbane, Gold Coast, Sunshine Coast, Toowoomba
New South Wales - Sydney • Western Australia - Perth, Bunbury
Victoria - Melbourne
www.thego2people.com.au
For personal use only